Brief:

• Coca-Cola plans to debut new apps in the U.S., Australia and New Zealand that will allow smartphone users to order multiple drinks ahead of time from a vending machine, according to VentureBeat. The apps will include artificial intelligence (AI) technology to gather more information about customer preferences for future marketing promotions.
• The integration between vending machines and smartphones aims to boost interaction with customers at the point of sale. AI is a central part of giving vending machines the ability to "create intelligence experiences," Greg Chambers, the global director of digital innovation at Coca-Cola, said at a VentureBeat conference in San Francisco.
• Lauren Kunze, the CEO of Pandorabots, which worked with Coca-Cola on the new apps, said personalization is a key feature in the vending machine bot and next-gen machines.

Insight:

One of the reasons soda makers like Coca-Cola and Pepsi have consistently maintained some of the biggest trucking fleets in the world is that the companies recognize the power of distribution. Because people generally want beverages quickly, a poorly stocked vending machine means lost sales. But vending machines traditionally have been low-tech points of sale that are susceptible to malfunctions and don't collect any information about their customers beyond what drinks are being purchased.

Coca-Cola wants to change this aspect of buying beverages from a machine to make it a key part of consumers enjoying its products. By integrating vending machines with smartphone apps, the company can let customers order several drinks ahead of time to enjoy with other people. It can also customize in-app offers to keep people coming back to a higher-tech vending machine. The app will also adjust to the user's geographic setting to fit the the unique behaviors and preferences of consumers in that area. At a college campus, the vending machine and app might take on a more fun tone, whereas in a hospital, the emphasis might be on the utility and functionality of the machine, Coca-Cola's Chambers said.

The app is the latest example of how Coca-Cola is leveraging technology to enhance the vending maching experience. The brand was an early adopter of Apple Pay and Android Pay, integrating them into vending machines for payments functionality.

The beverage giant is trying to reverse a sales decline that in April led the company to reduce its global headcount by 1%, with a 22% cut to upper management. Increasingly health-conscious consumers are turning away from sugary soft drinks in favor of bottled water. Coca-Cola and Pepsi saw per capita consumption of soft drinks fizz out last year, falling to a 31-year low, according to Beverage-Digest. Meanwhile, total volume grew as the companies marketed sports drinks and bottled water, which will also likely be for sale in the new AI-powered vending machines. Coca-Cola's Dasani water brand grew 5.3% and PepsiCo's Aquafina gained 10.9% in 2016.